Six Pixels of Separation - The Blog
September 24, 2008 5:08 AM

Selling 2.0 - Let The Customer Do The Communicating

What does it really take to sell something online?

Think about this for two seconds: You go to your favourite e-commerce site that sells books to check out the latest marketing book. You're about to buy it, but before you click the "add to cart" button, you peruse what other people thought of the book.

Even though the publisher describes it as the "feel-good marketing business book of the year," Sally from Pembroke, Ontario, lets you know that it's nothing more than regurgitated marketing pap that you've read a million times before. There is a handful of additional peer reviews on the same page that spell out a similar story. According to random strangers you have never met the book scores about a two out of a possible five stars.

Do you still buy the book?

Why do we trust random people over the publisher of the book? Shouldn't the publisher have a lot more skill and aptitude in discerning whether or not a book is good? More importantly, has the book seller completely lost its mind? Why would they run negative reviews of a product they are trying to sell?

Last week in Las Vegas, I spoke at the Shop.org Annual Summit. Shop.org is a division of the National Retail Federation and one of the largest associations with a focus on retail executives who sell their stuff online. (Full disclosure: Twist Image is a member of Shop.org and we sit on their Content Committee).  For the past several years, I've been presenting to this group on the value of providing some of the many social media applications to their customers. While it might seem obvious that the bigger retailers jump all over blogging, podcasting, online videos and getting into Facebook and MySpace, smaller retailers have been resistant.

The truth is that retailers have one goal online: One-click shopping. They want you on the site and buying. Everything else is a distraction and could reduce your impetus to buy.

But here's the reality: Shopping (online and in real life) is a social experience by nature. We don't go to shopping malls to buy and leave (at least not the majority of us). We go to shopping malls to walk around, see people, socialize, etc. ... It is part of who we are as community members. The online experience must replicate this to benefit from the same results that the physical stores have seen over the years.

Welcome to Selling 2.0.

The average e-commerce site has a two-per-cent conversion rate. You read that right. With all of their tactics to get you to buy, 98 per cent of the people who search for a product online, find an e-commerce page, click on it, browse around, but never buy a thing. From poor usability to lack of trust, the average e-commerce operator is not able to get most people to buy anything. One tool that is turning things around is peer reviews. Remember Sally from Pembroke?

Three things you need to know about how big of an industry buying online is:

1. In The State of Retailing Online 2008 study (conducted by Forrester Research): "E-commerce will rise 17 per cent this year, tipping it to $204 billion."

2. According to a recent Nielsen Global Online Survey (February 2008), "85 per cent of the online population has shopped online."

3. From PowerReviews' Social Shopping Study 2007: "65 per cent of consumers actively seek reviews."

The thing is, we just don't trust companies. We trust one another, and peer reviews are proof positive of this. Bazaarvoice is a company based out of Austin, Texas, that provides three-party audited peer reviews amongst other social shopping services to online retailers. It's a simple idea with long legs that has grown this company significantly.

Three-party audited peer reviews make sense. Not just to make sure that there's no bad language, talk of religion, etc. ... but it does build trust for the consumer knowing that the review is an actual human being and not an employee of the company.

According to Brett Hurt, founder and CEO of Bazaarvoice, shopping really is changing. Bazaarvoice has served over 10 billion peer reviews to date, and the majority of them are 4.5 out of five stars. Even more surprising, a negative review converts more effectively into a sale than a positive review.

You should read that last sentence again. How is that possible?

Trust.

Consumers shopping online who read a negative review trust the site they are on for providing candid and real feedback, and are more likely to make a purchase there. The other explanation for this strange phenomenon, according to Hurt, is that many times while a review may be negative in nature, the content is not all that relevant to the customer. An example would be a professional photographer bashing a simple point-and-shoot camera for its lack of functions. But for the consumer who needs to do some quick family shots, the review is not relevant. We also learn that many consumers write reviews for the products they love. They don't just create peer reviews when the product sucks.

The big lesson: Opening up a shopping site and inviting customers to take part provides a deep and rich content experience that build trusts and loyalty amongst all consumers. At the same time, it brings to the digital channel many of the real-life components that make shopping so much fun.

People are also good by nature. They don't only write to complain. With 10 billion-plus peer reviews out there - and the majority of them 4.5 stars - Selling 2.0 is more about enabling and empowering your consumers to connect to one another as it is about having them click the "buy" button.

Which e-commerce sites do you think are getting it right?

The above posting is my twice-monthly column for the Montreal Gazette and Vancouver Sun newspapers called, New Business - Six Pixels of Separation, that was published today. I cross-post it here with all the links and tags for your reading pleasure, but you can check out the original versions online here:

- Vancouver Sun - Selling 2.0: Let the customer do the communicating.

- Montreal Gazette - Wisdom of the Crowd Will Help You Sell Online.

By Mitch Joel


Comments Comments Feed
  • for further info on the same topic:

    ''According to Shop.org and MarketingSherpa studies, less than 26 percent of retailers have customer ratings and reviews, yet 96 percent of the retailers that do have reviews find it to be an effective or highly effective feature. So what is stopping other retailers from adopting this feature?''
    - Positives About Negative Product Reviews
    http://www.imediaconnection.com/content/13386.asp

    Reply
  • Posted by Parth Shukla
    Mitch Joel

    One major brand that I am really surprised that does not engender this trust is "Apple". It has one of the One major brand that I am really surprised that does not nurture this trust is "Apple". It has one of the strongest community of fanatics, a growing interest in its products from traditional PC users and a plethora of products that can be sold to consumers who once hooked through the mac can be up-sold.

    Whom would you rather believe, a peer telling you how easy it was to switch or the TV ad telling you, you need an Apple genius to help you with the switch?

    But, they are still one of the biggest eCommerce success stories, so how much does peer review really matter?

    Reply
  • Mitch Joel

    Apple has phenomenal products that people will wait in line for. Given their open source approach it is surprising they don't let people rave about their products for them.

    Threadless.com takes consumer input a step further than reviews. They use consumer input to decide what to produce. The designs are consumer contributions (they do pay the designers)

    Are there any other manufacturers doing this?

    Reply
  • This is an excellent article. It makes me think of another good article I read yesterday by Hank Williams (http://snurl.com/3tint) about how the fact that the next thing on the web will be to organize user data to make money. Reviews are probably the lowest hanging fruit out there on this front.
    With regards to resolving the issue of trust, this is what our team at Traackr is working on.

    Reply
  • Posted by Adam Singer
    Mitch Joel

    Thanks Mitch, you just inspired my blog post for tonight. I usually don't know what I'll write until the end of the day, but today you inspired it early.

    Reply
  • Posted by David Reinke
    Mitch Joel

    User reviews are key and if you look around, you will see there has typically been one company online that becomes the unbiased resource for consumer ratings in their vertical (think Amazon, TripAdvisor, Yelp, CNET, etc).

    The next evolution will be to allow users to filter who they want to get their rankings/reviews from. In the case of fashion (disclosure: I'm building a fashion review site), women need to know whether the reviewer/ranker actually shares their taste and is one of their fashion peers before trusting the content.

    Reply
  • Posted by Jacques Warren
    Mitch Joel

    I guess it also depends on the proportion of bad reviews for a certain product. 5 bad out of 5 would probably not be so good for sales, however candid the site, whereas 1 out of 5 still plays in favor of the site honesty while probably making the prospect think that the bad comment is probably due to particular circumstances, and that it is still safe to buy.

    Reply
  • Posted by Digimaven
    Mitch Joel

    I think part of Web 2.0 or selling on Web 2.0 has to be more than just straight reviews and comments. Having easy ways for users to directly advocate the site is something that will be very important, if it isn't already. "Share" or "Email to friend" techniques are just the tip of the iceberg.

    Reply
  • Parth - Apple is so big that the conversations are happening everywhere. I highly doubt it matters much if it's on their site or not. Check out the peer reviews for Apple on Amazon.com.

    This is one big tupperware party with lots of chatter. I think peer reviews are powerful and I agree with the other comments, they are going to evolve and become ever-more personal.

    Reply
  • Posted by Michael
    Michael

    Just found this blog - love it. Consider yourself in my reader. You've even become my first iTunes podcast subscription. Really good content.

    Reply
  • Posted by javabeanboy
    Mitch Joel

    I thought the sxipper concept of Identity 2.0 is apropos to this marketing 3.0. In a nutshell my identity as an amazon buyer would transfer to my reputation on say Ebay or Facebook marketplace. It's mashed together "me" (Someone call Jung, my persona is bifurcating).

    Reply
  • Posted by Roberto Davis
    Mitch Joel

    Whether I go to the Apple store or shop for New Balance running shoes, it never ceases to amaze me how much the customers communicate with other shoppers to market a product. Online business entrepreneurs can take note of this and consider the motto "less is more".

    Reply
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  • Here's an interesting nugget from Mitch Joel's recent post wrapping up the Shop.org Annual Summit: On customer ratings and reviews site, "a negative review converts more effectively into a sale than a positive review."

    At first, this might

  • Word of Mouth Geniuses of the Week from GasPedal's You Can Be a Word of Mouth Marketing Supergenius!

    Food Writer, Campusfork.comRed Bull: King of Gen Y MarketingA food writer walks readers through the history of how Red Bull got big. It all came down to building an enthusiastic fan base via grassroots word of mouth marketing. (link) Mitch